Home Selling in 08109>Question Details

Annie, Home Buyer in 08109

Concerning the ethical rules of a listing agent... is it legitimate for them to tell a prospective buyer that the seller declined a prior offer?

Asked by Annie, 08109 Wed Apr 14, 2010

Specifically, would it be proper for them to tell that prospective buyer that the seller was offered X but declined so that if they want the property they need to offer higher? This, before anything is even in writing?

I hope this question is specific enough for you. Thanks for your help

Help the community by answering this question:


Hi Annie,

I'm going to speak about NJ because you are in NJ. In NJ it is NOT ethical for the listing agent to reveal anything to the buyer or buyer's agent without the express permission of the seller. This is an ethics violation. Please read the Consumer Information Statement that your listing agent should have provided you.
So if the seller says to the listing agent. "I know my house is listed at 200k, but I'll take 190k and not a penny less" it is not ethical for the listing agent to divulge that without first asking the seller. If you're a seller, you have very valid reasons for guarding your motivations to sell. Why? The buyer's agent, if they're good, will try to ascertain the reason for selling, share that with the buyer and this may result in a lower offer to the seller. This is one reason I counsel my sellers to leave the home, if possible, during showings -- I caution them that if they must stay, they should not get into any casual conversation with the buyer's agent wherein they might divulge something that will weaken their negotiating position.

Even if my seller tells me, "You can tell them I won't take any offer lower than "x"; I will still counsel my seller that "You may not want me to say that. Why? Because then all they'll offer is "x" when maybe you could've gotten "x+5,000". Take it from me, someone who used to work in the cutthroat world of Manhatten's major-label music industry, It's best not to say anything and just let the negotiations play out and see where they lead. Remember, in negotiations, he who blinks first, or breaks the silence, usually loses -- so why would you want to start off giving the other party ANY information???

I hope that this answers your question! If you've found it to be helpful, please click the thumbs-up icon below!

Best Wishes to you, Annie!

Kimberly Thomas, Broker-Associate
Realty Executives Brown & Pope
4 votes Thank Flag Link Wed Apr 14, 2010
The devil is in the details.... and since we don't know both sides of the story, you're going to get answers all over the map on this question. You can read NAR's Code of Ethics for yourself here... http://www.realtor.org/mempolweb.nsf/pages/code See std of practice 1-15

One key element is the sellers instructions to the listing agent, however, the agent cannot lie, cheat or be dishonest just because the seller instructed them so.... I mean, we're not lawyers :-) haha only kidding. Another element is to consider if the agent's response is in the seller's best interests... and that is very subjective. If the listing agent's response encourages the buyer to make an offer, make a better offer or even to dissuade them from making a ridiculously unacceptable offer, one could argue that IS in the sellers best interests. Of course, you could argue the opposite just as well.... some might say the only acceptable response on the price is to quote the List price, unless you have authorization from the seller otherwise.

One solution to this problem is to avoid dual agency in the first place... if you're the buyer, get your own agent and don't deal with the listing agent. If you're the seller, give your listing agent specific instructions (written if necessary) on how you want price discussions handled.

I hope that's helpful... if so, click the "thumbs up" below,

Joe Montenigro REMAX Home Team
Broker, GRI (856)374-2800 x106
Serving Gloucester Twp, Washington Twp & South Jersey Real Estate Markets
Read my Blog at http://hometeamNJ.com/blog
2 votes Thank Flag Link Wed Apr 14, 2010
There is absolutely nothing wrong with saying, if asked if there have been any offers, to say "yes there have been 2, but they were declined as too low" if that is truly the case. However, disclosing the amount is not approprtiate.
2 votes Thank Flag Link Wed Apr 14, 2010
If an agent is a Realtor, meaning they are a member of The National Association of Realtors, then we are bound by a code of ethics. Among our many fiduciary duties to our clients is to follow their lawful instructions. If AND ONLY IF our client asks us to disclose to a buyer that the seller has declined a previous offer then it is not only legitimate but it is required of us. If an agent/Realtor disclosed that information without the consent of the seller then the agent would be breaching their duty to their client.
Web Reference: http://www.robertomeara.com
1 vote Thank Flag Link Tue Apr 27, 2010
I think it is time to take a Continuing Education class in Ethics. Per my blog below....it is un-ethical unless you have written permission from the seller.
Web Reference: http://www.cbchuck.com
1 vote Thank Flag Link Tue Apr 20, 2010
It is un-ethical for a listing agent to reveal anything to the buyer or buyer's agent without written permission from the seller. The listing agent would be in violation of our Ethics Law.
1 vote Thank Flag Link Tue Apr 20, 2010
Good answers below, and Kim's probably does rate as "Best Answer."

Let me add just one other thing.

Even though a seller may have rejected a previous offer of X--let's say $400,000--doesn't mean that another potential buyer shouldn't or couldn't offer $400,000, or even $375,000 or so. People's needs and perspectives change. I've seen a lot of times where an offer comes in fairly early in the listing process that's a bit low, but not unreasonable. The seller rejects it. Then there aren't any other offers, or any subsequent offers are even lower. And the seller says, "Gee, I really should have taken that first offer."

As noted below, if the seller specifically says, "Don't show me any offers below $425,000," then your offer of $390,000 won't get presented. But, if there's no such direction from the seller, then your offer must be presented.

So, the answers below address the ethics aspect. As for what to do if informed that a seller rejected a previous offer at a specific price, my advice is: Determine what the house is worth. Offer no more than that. But don't worry about offering less. And pay very little attention to what a seller may have done weeks or months earlier.

Hope that helps.
1 vote Thank Flag Link Tue Apr 20, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
If seller has directed listing agent to disclose this information (and it is true) it is proper. If either seller has not instructed agent to say this or if it is not true it is unethical. Even if a seller has turned away an offer in the past though, it is unknown if they will turn it away again. Many times sellers wish they had taken that first offer they dismissed. Have your agent put it in writing anyway. (just to be sure).
1 vote Thank Flag Link Wed Apr 14, 2010
Some good advice here for you and some not so good.

If the listing agent has direct orders from their seller not to bring them an offer under "x" amount of dollars then the listing agent has a duty to abide by the seller's wishes. That said, we are obligated not to take matters into our own hands and make the decision as to whether or not we should present an offer!

As far as obtaining your own agent, be very careful here. In my state there is something called "procuring cause". Depending on how you came upon this home is what would determine whether or not the listing agent has procuring cause. If he/she does, and you now bring in your agent, you could potentially be charged by both agents.

Just a word of caution.

Web Reference: http://www.lindacefalu.com
1 vote Thank Flag Link Wed Apr 14, 2010
The idea behind your offer is to make it logically the best offer for the seller. Your agent should be able to communicate this. The sellers agent is most likely conferring with their seller but doing as instructed. However, you should submit it in writing with a deadline. Even though he can decline it they still will submit it to seller. always nice to see it in writing. Sometime the seller will think twice before declining the offer if it looks real enough. It maybe because they just cant go any lower. Many homeowners are backed against the walls. They cant go out without even owing a dollar after the sale.
Communicate in writing with a deadline and put money in front of them. Can;t catch a mouse without the bait. Dangle the cheese in front of them. But if they can;t go lower then you may have to walk. Hopefully not too much was conveyed between the agents. Present the offer and shut up. Make a deadline and dont get emotionally attached. I know its hard but set your mind. when offering a lower price you have to realize it ma not work. In fact I prepare my buyer clients to mentally get ready to walk, nothing is done until its written and under contract. Dont leave anything for chance. Act fast and diligent.

Search all bank owned homes Free: http://www.foreclosuresfornewjersey.com

Larry Sarlo
Weichert Realtors
1 vote Thank Flag Link Wed Apr 14, 2010
Sure, it would be proper.

The ethical issues usually center around whether the agent is representing the seller or themselves in the discussion.

So, if the Seller has told the agent, "let these meshuggah buyers know, I had an offer for x and I tore it up right in their face," the agent is acting ethically in telling you this.

This doesn't preclude you for writing up a ridiculously low offer, and the agent is legally obliged to deliver that offer to the seller, even they need to wear a haz-mat suit when doing so, and even if the offer is safely encased in a hermetically-sealed bag.

Now, if the Seller told the agent no such thing, and the Seller finds out . . .
1 vote Thank Flag Link Wed Apr 14, 2010
Dear Annie,

If the seller has instructed his or her agent to do so, then it is legal. I have had sellers that have instructed me to tell any potential buyer that they will not accept less than $^&^& for their property. This would take place between agents as a rule. If we are in the middle of a counter and the seller says, "tell them my final offer is "x" amount and then the other agent says to me that their buyer is thinking of writing a counter for "x" amount, then this would be appropriate for me to tell them this information.

However, without knowing exactly what transpired, and from this limited information, it is difficult to give you a complete answer. You may have been thinking of offering a higher price than what you were told and that could present a problem, but without more details, I cannot say.

1 vote Thank Flag Link Wed Apr 14, 2010
It depends on what the seller has expressed to the agent to disclose and not to disclose. Sometimes agents will offer that info as a "Heads up" to the agent or prospective buyer so as not to waste everyone's time with an offer that the seller will not like to consider (of course the buyer/agent is still free to submit the offer regardless of this info, and all offers in writing; by law; must be submitted to the home owner) But still the lowest a seller will except for the sale price is (or SHOULD be) guarded info and not disclosed.

I really hope this help, Anne. If you need more explanation feel free to give me a call- 856-397-7812

0 votes Thank Flag Link Mon Mar 28, 2011

Every offer is different, even the offer price is the same, the contingencies may differ. Telling buyer not to offer under X dollar amount will not benefit seller. You should encourage buyers to submit offer, and review every offer closely.
Web Reference: http://www.teanwong.com
0 votes Thank Flag Link Tue Apr 27, 2010

Despite the fact that this is a buyers market, a seller can remain in control of the offer process; i.e.advising the agent he/she (1) has rejected a previous offer at ??? or (2) not want the listing agent to advise them of anything less than ???.

Most recently, I had a seller indicate that she would not entertain anything less than ??, I had turn turn away multple potential buyers whose agents had planned on offering less than ??. Howeer, I did keep track and advise the seller of the number of agents/prospects I had to turn away due to this edict. When I did receive an initial offer that was close to the seller's edict, I did feel obligated to present that offer and in light of current market conditons advise the seller to seriously consider the offer that was close to their edict. The result being a property under contract . . . sometimes the carrying cost can outweight a nominal different in seller expecations.

Francesca Patrizio, ePro, SRES
Coldwell Banker Residential Brokerage
732.606.2931 (DIRECT/CELL)
Web Reference: http://www.PatrizioRE.com
0 votes Thank Flag Link Tue Apr 27, 2010
There are some details left out of this question. I would not divulge a seller's declination of an offer until a buyer has shown an interest in making an offer. I certainly wouldn't stand around at `an open house saying offers were declined. Someone else made a comment about saying "The seller won't take less than $x with x being anything under the asking price.). This is a big no-no in New York. We are only able to quote the listing price. Saying anything else is not working in the best interest of the seller. Another suggestion was that buyers should have their own agent--Great advice! The listing agent has the seller's best interest at hand. The buyer customer is only entitled to fair and honest dealing. A buyer should have a buyer agent working FOR them.
0 votes Thank Flag Link Tue Apr 20, 2010
Annie, it's legitimate if you check with the Seller first and get their approval. In this market with offers so much lower than the asking price, it's not really as much an issue, but in more of a Seller's market it could be different. I always get the Sellers approval that way you are safe.
0 votes Thank Flag Link Tue Apr 20, 2010
This is the very reason why Annie should have hire her own Buyer Agent. If you had, your buyer agent would have known out front if the seller had ever declined a previous offer or if the listing agent is just using that excuse in order to justify a bigger commission. Without knowing the intent on the part of the listing agent, one cannot assume that the actions taken were truly unethical.
0 votes Thank Flag Link Tue Apr 20, 2010
yes, this has happend to me with a buyer many times.
0 votes Thank Flag Link Tue Apr 20, 2010
Yes, it would be legitimate. The listing agent can disclose what the offer was with the sellers permission. I always tell buyers that regardless of what the seller has done in the past, it does not guarantee what they would do with a new offer since circumstances and situations may have changed for the seller after the first offer was received and declined.
0 votes Thank Flag Link Tue Apr 20, 2010
The listing agent is working for the seller to get the best sale price possible. An important consideration is that the listing agent HAS to present your offer to the seller, even if you choose to write it for less than "X". So regardless of what the listing agent says, if you want to make an offer, they have to present it to the seller. And just because the seller said "no" once before, doesn't mean they will this time.
0 votes Thank Flag Link Tue Apr 20, 2010
Talking about a prior offer is not a breech of confidiality. Let me give you an example. Say that I have a listing that had an offer that the seller has declined. Another agent calls me who had recently showed the property and is telling me that their buyer is interested in presenting an offer and they tell me that they really want a deal and they are going to offer 30,000 under the asking price. The offer that was turned down was 20,000 under asking, so after running it by the seller, I call them back and tell them that they really need to sharpen their pencil if they really want the property. There is no breech here. However, it did save some time and paper.

Debbie Albert, PA
0 votes Thank Flag Link Tue Apr 20, 2010
The listing agent would not tell the amount of a previous offer without written permission of the seller. A flat statement that a pervious offer was declined is perfectly ok to say. I don't feel referencing a certain dollar amount is right. As the listing agent works for the seller it is their job to try to encourage a buyer to make a highest and best offer.
0 votes Thank Flag Link Tue Apr 20, 2010
GREAT QUESTION: however many home buyers believe they can purchase a home for 50% less than list price if not a bank foreclosure or a short sale.

As a listing agent if a buyers agent contacts me states their buyer will be submitting an offer AND include in our private remarks low ball offers will be immediately declined, We have it in our listing agreement with property owners if the offer is not $xxx,xxx and above their preference not to be bothered.

We have them sign a statement where we return it to the buyers agent

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Apr 20, 2010

I agree, Kim's answer is the best--you definitely need to have the permission of the seller to divulge that information but, as she advises her sellers, why WOULD you show your cards? It's always best to let the negotiations go through the natural process--we oftentimes learn something about the buyers that we can get an even better price. For example, many buyer present their pre-qualification letter from the lender with their maximum amount that they can finance--it can sometimes be significantly higher than even the list price on the home. Well, my sellers know that they can pay full price so, why not push for that in the negotiations! We now know how hard we can push!

Good luck!
Web Reference: http://www.SoldByDebe.com
0 votes Thank Flag Link Tue Apr 20, 2010

The only time it is ethical is when the seller informs the listing agent that because they rejected this offer let any prospective buyers know that if you are X or less I am not considering it.

the agent can in no way reveal such information unless SPECIFICALLY instructed to do so by the seller. The listing agent is working for the seller not the buyers.

Dave dicecco
Web Reference: http://www.davedicecco.com
0 votes Thank Flag Link Tue Apr 20, 2010
It would be appropriate with the seller permission and only with seller permission.

Good luck

0 votes Thank Flag Link Tue Apr 20, 2010
Hi Annie
It is really up to what the seller has instructed their listing agent to do. Many sellers allow their listing agent to disclose that they will not consider any low ball offers below a cetain dollar amount & have their permission to share that with others. However by law a listing agent has to present all written offers . So as a buyer if your buyers agent is telling you the listing agent said the seller declined offer X & that you need to offer higher you can do 2 things. Make a higher offer or insist that they present your offer anyway. You may get lucky & the seller may reconsider taking a lesser amount at this point in time. You have nothing to lose & you can always increase your offer.
0 votes Thank Flag Link Sat Apr 17, 2010
With the sellers' permission, the agent can divulge that information.
If the agent knows they refused a certain dollar amount, it will only benefit the buyers' agent, too. It acts as a starting ground for any subsequent offers.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Thu Apr 15, 2010
Hi Annie,

It would be perfectly fine if the seller instructed his agent to tell any buyers that he wants only an offer higher than a prior offer, or higher than any particular number. However, even if this is true, you still have the right to make your offer anyway and the listing agent still has to present it. So review the market with your agent, and make a reasonable offer based on that data. If that's not good enough for the seller, then move on to another home.

Actually you should not be dealing with the listing agent at all, and you should not be discussing verbal offers with the listing agent. You should be presenting your offer in writing through your buyers agent only.

Never deal with a listing agent, always use your own agent. The listing agent is your adversary and is acting in the best interests of the seller. And never consent to dual agency. Always retain your own agent who represent your interests and your interests alone. It is unethical for an agent to attempt to represent both sides of a real estate transaction, even though the law allows it. So don't fall into that trap.

Buyers need to educate themselves to never call on a yard sign or an Internet or newspaper ad. Always have your agent make that call. You don't want to be dealing with the listing agent who is by definition your adversary.

Good luck!


Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Web: http://www.marcpaolella.com
0 votes Thank Flag Link Wed Apr 14, 2010
As a previous answer suggests there is only limited information in your question, but if you are the buyer and are wondering if it is legit for the listing agent to tell you that a buyer has declined an offer previously there isn't really anything that says that it is wrong, however, I have had sellers say "I don't want anything less than $xyz " and have someone bring an offer for less, but part of negotiations are things like date of closing, down payment and such so I would always ask my agent to present my offer to the seller or sellers agent regardless. If you are a buyer I would highly suggest that you find an agent to represent your best interests. Linda

Linda B. Conner-Realtor
Prudential Fox & Roach
Northfield Home Marketing Center, NJ
Serving Atlantic and Cape May Counties
cell: 609-369-2739 fax: 609-677-4477
E-mail: OCRealtor@comcast.net
Who's the next person you know planning to buy or sell?
Call me & I'll take great care of them!
Web Reference: http://www.lindaconner.com
0 votes Thank Flag Link Wed Apr 14, 2010
There is nothing illegal about it, and depending on the circumstances it may be practical to avoid a lot of unnecessary work. If the agent knows that the client will not accept a particular offer why not tell the buyer?
There is nothing unethical about telling the truth. The Listing Agent should do whatever his client instructs him to do. However, if you are the Seller, you probably want to see all offers.

By the way, if you are the Buyer hopefully you have your own agent looking out for your best interests
0 votes Thank Flag Link Wed Apr 14, 2010
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